Land woes may scare foreign investors

JAKARTA (JP): Legislators urged the government yesterday to ease land-use restrictions for foreign investors, with the aim of making Indonesia a more attractive place to do business.

In a hearing with State Minister of Agrarian/Chairman of National Land Agency Soni Harsono, they said the government's policies were intended to woo foreign investors and should be accompanied by concrete moves to create legal certainty.

Under the Indonesian laws, foreign businesses can use land for up to 35 years, at which time the limit can be extended. Legislators consider the concession period too short and feel that it may be discouraging to foreign entrepreneurs.

Legislator Anak Agung Oka Mahendra said not only was the concession period too short but the agrarian law was yet to be amended to give legal certainty to investors.

"Otherwise, foreign investors will stay away from Indonesia even though the government has taken numerous deregulatory measures," said the House member from the government-backed Golkar faction.

There has been concern that Indonesia my lose investors to other emerging Asian markets like Vietnam and China, which offer land use concessions of up to 90 years.

Soni declined to comment on whether the government considered reviewing the policy on the land concession period for foreign businesses.

He said land-use rights were granted to joint ventures which were established and operated in Indonesia.

"There are proposals for the government to allow foreigners to own land, but of course it would be illegal if the did," he said.

The idea was also opposed by legislator Hasanudin, who warned that it would eventually mean the selling of the country.

Soni said the most intense controversy over land ownership by foreigners was raging on the quickly developing Batam Island, which is becoming a holiday spot for the neighboring Singaporeans.

The central government has rejected proposals by Batam officials to issue regulations that would allow foreigners to own houses on land they leased from the local government, he said.

He said local officials questioned the motives behind Singaporeans' desire to own houses on Batam, given that Singaporean realtors were aggressively engaged in advertising apartments on the island state in Indonesian newspapers.

"Obviously, housing is not their primary concern and therefore their motives are dubious," he said.

Yesterday's hearing was dominated by debates across the country about land use. Several people who are being forced to give up their property to make way for development projects were present. (pan)